Required information [The following information applies to the questions displayed below.] Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company's five activity cost pools: Activity Cost Pool Labor-related Purchase orders. Product testing Template etching General factory Activity Cost Pool Labor-related (DLHS) Activity Measure Direct labor-hours Number of orders. Number of tests Number of templates Machine-hours Product A Product B Product C Product D Total Overhead Cost Expected Overhead Cost 2. The expected activity for the year was distributed among the company's four products as follows: Expected Activity Product B Product C Product A 500 60 260 0 3,900 $ 40,320 $1,650 $ 7,700 $ 1,260 $ 69,000 Expected Activity 2,240 DLHS 140 120 60 28 3,200 800 170 550 orders 385 tests 45 templates 11,500 MHS T Purchase orders (orders) Product testing (tests) Template etching (templates) General factory (MHS) Using the ABC data, determine the total amount of overhead cost assigned to each product. 0 15 1,500 Product D 800 200 65 2 2,900

Required information [The following information applies to the questions displayed below.] Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company's five activity cost pools: Activity Cost Pool Labor-related Purchase orders. Product testing Template etching General factory Activity Cost Pool Labor-related (DLHS) Activity Measure Direct labor-hours Number of orders. Number of tests Number of templates Machine-hours Product A Product B Product C Product D Total Overhead Cost Expected Overhead Cost 2. The expected activity for the year was distributed among the company's four products as follows: Expected Activity Product B Product C Product A 500 60 260 0 3,900 $ 40,320 $1,650 $ 7,700 $ 1,260 $ 69,000 Expected Activity 2,240 DLHS 140 120 60 28 3,200 800 170 550 orders 385 tests 45 templates 11,500 MHS T Purchase orders (orders) Product testing (tests) Template etching (templates) General factory (MHS) Using the ABC data, determine the total amount of overhead cost assigned to each product. 0 15 1,500 Product D 800 200 65 2 2,900

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Description: Required information[The following information applies to the questions displayed below.]Rusties Company recently implemented an activity-based costing system. At the beginning of theyear, management made the following estimates of cost and activity

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 10MC: What is the proper order of tasks In an ABC system? identify the cost drivers, assign the costs to...

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The following items are associated with a traditional cost accounting information system, an activity-based cost accounting information system, or both (that is, some elements are common to the two systems): a. Usage of direct materials b. Direct materials cost assigned to products using direct tracing c. Direct labor cost incurrence d. Direct labor cost assigned to products using direct tracing e. Setup cost incurrence f. Setup cost assigned using number of setups as the activity driver g. Setup cost assigned using direct labor hours as the activity driver h. Cost accounting personnel i. Submission of a bid, using product cost plus 25 percent j. Purchasing cost incurrence k. Purchasing cost assigned to products using direct labor hours as the activity driver l. Purchasing cost assigned to products using number of orders as the activity driver m. Materials handling cost incurrence n. Materials handling cost assigned using the number of moves as the activity driver o. Materials handling cost assigned using direct labor hours as the activity driver p. Computer q. Costing out of products r. Decision to continue making a part rather than buying it s. Printer t. Customer service cost incurred u. Customer service cost assigned to products using number of complaints as the activity driver v. Report detailing individual product costs w. Commission cost x. Commission cost assigned to products using units sold as the activity driver y. Plant depreciation z. Plant depreciation assigned to products using direct labor hours Required: 1. For each cost system, classify the relevant items into one of the following categories: a. Interrelated parts b. Processes c. Objectives d. Inputs e. Outputs f. User actions 2. Explain the choices that differ between the two systems. Which system will provide the best support for the user actions? Explain. 3. Draw an operational model that illustrates each cost accounting systemwith the items that belong to the system used as examples for each component of the model. 4. Based on the operational models, comment on the relative costs and benefits of the two systems. Which system should be chosen?
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What is the proper order of tasks In an ABC system? identify the cost drivers, assign the costs to the products, calculate the overhead application rate for each cost pool, identify the cost pools assign the costs to the products, identify the cost drivers, calculate the overhead application rate for each cost pool, identify the cost pools identify the cost drivers, identify the cost pools, calculate the overhead application rate for each cost pool, assign the costs to the products identify the cost pools, identify the cost drivers, calculate the overhead application rate for each cost pool, assign the costs to the products
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Required information [The following information applies to the questions displayed below.] Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company's five activity cost pools: Activity Cost Pool Labor-related Purchase orders Product testing Template etching General factory Activity Cost Pool Labor-related (DLHS) Activity Measure Product A Product B Product C Product D Direct labor-hours Number of orders Number of tests Number of templates Machine-hours Total Overhead Cost Expected Overhead Cost $ 30,115 $ 2,320 $ 6,930 $ 870 $ 65,100 2. The expected activity for the year was distributed among the company's four products as follows: Product A 625 30 190 Expected Activity 1,585 DLHS Product B 160 Purchase orders (orders) 190 Product testing (tests) 55 Template etching (templates) 17 3 General factory (MHS) 3,600 1,700 2,300 Using the ABC data, determine the total amount…
All applicable Exercises are available with McGraw-Hill’s Connect™Accounting.Cost classifications For each of the following costs, check the column(s) that most likely apply:Cost Variable FixedWages of assembly-line workersDepreciation—plant equipmentGlue and threadShipping costsRaw materials handling costsSalary of public relations managerProduction run setup costsPlant utilitiesElectricity cost of retail storesResearch and development expense
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Required information[The following information applies to the questions displayedbelow.]We discuss how to prepare the process costing production reportusing the weighted-average method. In addition, we discuss that aproduction report is a summary of what occurs in the productionprocess, and includes information about the number of physicalunits, number of equivalent units, cost per equivalent unit, and areconciliation of the cost of Work in Process Inventory. Knowledge Check 01Paula's Fab Tee Company, which prints T-shirts, has three processingdepartments (printing, labeling, and packaging). The total cost per equivalentunit was $17.80 for the printing department, $0.80 for the labeling department,and $0.40 for the packaging department. The total cost of the 1,450 units thatwere transferred out of the Work in Process Inventory (Packaging) account tothe Finished Goods Inventory account was:
Required information [The following information applies to the questions displayed below.] Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company's five activity cost pools: Activity Cost Pool Labor-related Purchase orders Product testing Template etching General factory Required: 1. Compute the activity rate for each of the activity cost pools. Activity Cost Pool Labor-related Activity Measure Direct labor-hours Number of orders Number of tests Number of templates Machine-hours Purchase orders Product testing Template etching General factory Activity Rate per DLH per order per test per template per MH < Prev Expected Overhead Cost $ 18,000 $ 1,050 $ 3,500 $ 700 $ 50,000 5 of 5 Expected Activity 2,000 DLHS 525 orders 350 tests 28 templates 10,000 MHS ww Next